Being a car owner you always worried about your car insurance. Some people can easily handle those things but the majority always think that why is my car insurance so high? What is the main reason behind this?
There are some data and important points that matter a lot for having car insurance so high. These factors majorly decide your premiums set by your insurance companies are beyond your control.
Some of these are your age, location, and income history. Which you can rectify, the more you take care of those things the lower your car insurance would be.
So in this comprehensive guide, I’ll clean all of the doubts and questions related to why is my car insurance so high?
stick to this article,
7 reasons why car insurance companies charge so much
We have talked a little about car insurance companies premium strategies. So why is my car insurance so high?
There are several reasons that make insurance companies charge a high amount of insurance from car owners.
1. The size of claims
In the insurance industry, it is often called “claims severity”. It is trending higher and affecting several auto insurance companies. Increment in the medical bill and other facilities causes a drastic increase in claims severity. The rising price of auto parts contributes as well in the high amount of car insurance premiums.
But unfavorably, there are more personal auto claims as a result of Americans driving more distances. The more the trend will go up to claim more medical and others cover the more insurance companies will face loss in terms of their insurance packages.
According to a report of CNBC
“If you look at companies like Allstate and Geico, last year, in particular, they reported much higher (personal claims) frequency than they had expected, and that eroded their profitability,” said Meyer Shields, a stock analyst at investment bank Keefe, Bruyette & Woods. “They are slowly building that back now, really through just higher insurance rates.” the doubts related, in particular,
2. Your living location
Yes, your living area has also a major impact on your car insurance and the surprising part is you probably may not know about that.
Different areas have different rates of medical facilities and other auto equipment. We can easily figure out traffic between cities and rural areas.
In cities, we face a lot of traffic and the number of accidental cases are more than rural areas. So behalf on these things a car insurance company sets their insurance coverage amount.
Let’s take an example and break it.
If you belong to the city and high traffic areas then your insurance premiums gonna be very high because in cities the no of a car accident is more compared to normal rural areas.
And if you live in a small town, and also work in the small town your car insurance will be cheaper than the people who live in cities and work from there.
Location matters when it comes to your question why is my car insurance so high?
3. How often you drive your car
If you drive regularly on a daily basis then there is more chance to have some issue with your car performance and with any auto parts.
There are also more chances for an accident or small crashes in your car.
But if your drive occasionally the chances of having any issue or crash is always very less. So most of the insurance companies take care of your car usage and work profile for your insurance plans.
4. What is your age
Your age is another factor for your high insurance rates. In most of the cases, we had seen young people show more irresponsible for their safety.
As compared with other age groups, teens and young age groups are less likely to use seat belts; only a few of them used to wear a regular seat belt during driving.
And later it will cause a major injury to both car and person. The other thing is that young people are more aggressive, they drive at over speed and sometimes also they are drunk and drive.
So this scenario found in most of the deadly accident cases in that case insurance companies have to cover a larger amount according to their insurance policies.
Young drivers are more likely than older drivers to underestimate or not be able to recognize dangerous situations. Young peoples are also more likely than adults to make an impulsive decision that leads to serious crashes.
So this is another big reason “why is my car insurance so high?”.
5. Your Driving experience
It is a very simple concept to understand and is also responsible for your query for “why my car insurance is so high”.
Let’s break this point with a small example
If you are a newbie car driver and you are only driving the car for only a few months then there is more chance that you will crash your car.
And this scenario increases expenses of an insurance company so as to not to bear this loss they already had set up a plan in which insurance rates are high for newbie drivers who have less experience compared to the experienced drivers.
So if you are a newbie or you have not much experience in driving then you are going to lose your pocket to car insurance companies.
6. Which car are you driving
The insurance company covers the following things in your car insurance
- The Entire Vehicle
- The Parts of the Vehicle
- Your Liability
Here we are gonna talk about how the Entire Vehicle and the Parts of the vehicle effect on having hour car insurance so high.
Let’s suppose you are driving a car which is rare and expensive. It is not easily available everywhere in that case if your car got crashed and needs to claim some parts replacement under insurance policies then it is really gonna be costly to exchange.
But if you own a normal car which parts are available everywhere then it would be very easy to replace it and also it would not cost so much.
So having an expensive or luxury car is also another big reason for your car insurance is so high.
7. What is your gender
According to a study, Highway Safety reports that no accidents with male drivers are typically more than accidents with female drivers,
And many drivers are more in count If we consider dead people in road accidents. So by this, insurance companies often charge men (young men) a high insurance amount compared to a woman.
Young men are specifically highlighted because in drivers young means always seen as they break traffic rules or also found in drink and drive cases.
So yup.!! These are the most common 7 reasons which are responsible for the term “why is my car insurance so high” or we can say these are the top 7 common points we neglected during choosing a car insurance company.
How to reduce expenses on car insurance?
Now we have figured out why is my car insurance so high. Let’s have a look at some simple easy ways to reduce car insurance expenses.
- Always look for best
Always look for best plans when your insurance plan is going to expire. No matter how cheap offers you got from the existing insurance company.
In 12 months everything changes. It might be possible you’ll find some better option and price deal with another company.
Always choose an insurance company for your car with proper market research. Yes, I will take some time but you will save your extra money which you are going to waste.
- Look into car insurance discount
When you choose a car insurance company make sure that it gives you a discount on the renovation. There are also a lot of insurance companies are also available which can give you a better offer with discount renovation.
You just need to keep your eyes open and don’t get convinced by your existing insurance company that their services are best.
- Your Insurance Agent or Broker Can Help You Lower Your Car Insurance Price
There is an easy way to figure out from which you can control your insurance premiums that are so expensive.
Just ask your insurance agent or dealer about these reasons from which your insurance budget increased.
If they aren’t able to find the exact reason then help them by asking to change in the same car which you own if you think this is because of your vehicle.
If you think it is because the area you live in, you can test by quoting a change in the ZIP code to see. If you something change in result of this change and all other thing remains same then you got actually what is the problem with you that why car insurance is so high.
Always encourage them to give you a discount price. You can give them any examples of other companies if they are giving some massive discounts.
So these are all reasons most common why is my car insurance so high. For that, I have also mentioned some best ways to reduce your insurance budgets.
If you liked any of these points in this article let me know in the comments.